MIDDLEBURY — Middlebury officials will try to pare at least another $120,000 from a 2013-2014 municipal budget proposal in order to achieve the selectboard’s goal of limiting the spending plan’s impact on residents. The goal is an increase on the local property tax rate of no more than 5.5 cents while maintaining current services.
This is shaping up to be a particularly challenging budget year for Middlebury after three consecutive years of belt-tightening that produced a stable municipal property tax rate. Middlebury Town Manager Kathleen Ramsay explained the current challenges come in large part from a looming debt service payment on the voter-approved fire stations project and by the fact that the board is committed to not applying any of the town’s eroding fund balance to stabilize the budget.
Next year’s payment on the $4.625-million fire project bond will add 3.5 cents to the municipal rate, while the decision not to apply any fund balance to the budget will mean having to look for another penny on the tax rate in revenues. So that’s 4.5 cents of the targeted 5.5-cent tax rate increase already spoken for. A penny on the municipal tax rate in Middlebury raises around $72,000. The current municipal tax rate is 86.2 cents per $100 in property value.
Board members have asked Ramsay to consider, among other things, possible savings in personnel and/or reducing budget categories that have been under-spent in recent years.
“Frankly, those have been few and far between,” Ramsay said of unspent line items. “For the past several years we have held the line on spending and pretty much tapped out those under-utilized line items.”
Nonetheless, department heads took a hard look at their respective budget proposals last month and found a combined total of $81,837 in savings. Those cuts included $13,304 to the Middlebury Volunteer Ambulance Association account; $23,000 from the capital improvements account; $8,609 from the Middlebury Fire Department account; $9,000 from the Middlebury Police Department account; and $5,828 from the Ilsley Public Library account.
“The department heads did a fantastic job,” Ramsay said. “It was a little bit here, a little bit there and it all added up.”
While encouraged, Ramsay noted another $120,000 needs to be trimmed in order to meet the selectboard’s directive. And the board will have to do this without the aid of any surplus, or “fund balance” money.
“We have used the fund balance in the past several years to stabilize the budget at the height of the great recession,” Ramsay said. “That (fund balance) has fallen below levels recommended by auditors, such that we are at about $208,000 projected for the end of this fiscal year. The recommended minimum (for Middlebury) is $450,000. So the selectboard is committed to rebuilding the fund balance.”
So in essence, Middlebury officials want to craft a new spending plan limited to $72,000 (one penny on the tax rate) in new money. That budget will need to reflect such fixed costs as contracted wage and health insurance increases for employees and anticipated bumps in fuel expenses.
Officials are also concerned about what they see as slow growth in the town’s grand list.
“We saw a 1-percent growth in the real estate grand list ($6 million), however that was offset by a $5 million reduction in personal property, due to the town’s six-year phase-out of the machinery and equipment tax,” Ramsay said.
Selectboard members on Dec. 18 asked Ramsay to look at the possibility of delaying the replacement of some municipal equipment in order to save some money.
“What we are trying to do is find ways to substantially cut the budget and make ourselves leaner, but not cut off limbs,” Selectman Victor Nuovo said.
Nuovo added he’s gratified with department heads’ efforts thus far in making cuts. He said the selectboard should be careful to preserve as many services as possible, particularly those to the most vulnerable townspeople.
“I can’t think of a social service that we provide funding to that isn’t worthy of it,” Nuovo said.
The selectboard will next discuss the budget on Monday, Jan. 7, in an effort to make further cuts for a spending plan that would be put out for a Jan. 22 public hearing.
“Some tough decisions are going to have to be made,” Ramsay said.
Reporter John Flowers is at [email protected].